Renting or Buying a Home: Why Rent vs. Own Data Affects Rentals

Read Time: 4 Minutes
2/10/2025

Table of Contents

Introduction: Should You Invest Where People Are Renting or Buying Homes?

One of the biggest decisions in real estate investing is choosing the right location.

Some areas have more renters than homeowners, making them great for rental properties.

Others have more homebuyers than renters, making them better for flipping houses or selling move-in-ready homes.

But how can you tell if a neighborhood has too many rentals or if it’s better suited for homeownership?

That’s where Rent vs. Own data comes in.

By using rent vs. own data, investors can:

Find areas with strong rental demand.
Avoid places where too many rental properties create high competition.
Identify good zip codes for flipping or selling homes to first-time buyers.

Why Rent vs. Own Data Matters for Investors

When people are deciding between renting or buying a home, they look at affordability, job security, and long-term plans. As an investor, you should be thinking about supply and demand for different types of properties.

1. Finding Areas with Strong Rental Demand

If you’re buying a home to rent out, you want to invest in an area where renters need housing, but there aren’t too many landlords competing for tenants.

📊 Best rental zip codes have:

30-40% renter-occupied – Enough demand for rentals without too much competition.
Growing population – More people moving in means more renters. (See why population growth matters.)
Affordable home prices – Higher rent-to-price ratios make rentals more profitable.

2. Knowing When to Flip Instead of Rent

If a neighborhood has a high percentage of homeowners, it’s probably better for flipping homes or selling to buyers.

🏡 Best zip codes for flipping and selling homes have:

60% or more homeowners – More people prefer to buy instead of rent.
High demand from first-time homebuyers – People want homes they can afford.
Good appreciation trends – Property values are increasing over time.

3. Avoiding Areas With Too Many Rental Properties

If a neighborhood has too many rental properties (70%+ renters), landlords often struggle with:

Falling rental prices – Too many landlords competing for tenants.
Higher vacancy rates – More empty units mean less income.
Frequent tenant turnover – Shorter lease terms and more evictions.

My Advice: Target the 30-40% Renter Market for the Best Investments

Over the years, I’ve seen investors make one of two mistakes:

Buying in areas with too few renters – They struggle to find tenants and have to lower rents.
Buying in renter-heavy areas with too much competition – They face price wars, frequent turnover, and vacancy issues.

The best rental markets have 30-40% renter-occupied households.

Why?

Strong demand for rentals but not too much competition.
Stable property values in case you ever want to sell.
Good mix of renters and buyers, keeping the neighborhood desirable.

If you’re flipping homes, stick to zones with high ownership rates—these buyers want to buy, not rent.

Final Thoughts: Find the Right Zip Code for Your Investment Strategy

Whether you’re planning on renting or buying a home as an investment, knowing the rent vs. own breakdown of a neighborhood can make or break your success.

Want to invest in rentals? Look for 30-40% renter-occupied zip codes with growing demand.
Want to flip homes? Stick to zones where people want to buy homes, not rent.
Want to avoid rental competition? Avoid areas with 70%+ renters where landlords are fighting for tenants.

To make it easy to find the Rent to Own ratio in a market, use BrightInvestor’s connection with the US Census and 20+ tools to:
– Quickly identify rental demand hotspots.
– Avoid oversaturated rental markets.
– Find the best zip codes for flipping or rentals.

👉 Start using Rent vs. Own data today by signing up for BrightInvestor here!